What's in store for F1

[Dare]

Bernie needs to share more with the lower teams
or he won't have a product to sell.The 3 car team
might work for the richer teams but how about Sauber or Williams?


http://www.planetf1.com/driver/18227/9536954/Fernley-fears-losing-more-teams

[Jericoke]

Bernie needs to share more with the lower teams
or he won't have a product to sell.The 3 car team
might work for the richer teams but how about Sauber or Williams?


http://www.planetf1.com/driver/18227/9536954/Fernley-fears-losing-more-teams

The lower teams need to earn more money.

Ferrari, McLaren and Red Bull aren't the top teams because the F1 pays them.  They're the top teams because they have tonnes of sponsorship which they use to fund their racing activities.

You can't just show up on the paddock with your hand out and expect to be paid, can you?

I feel sorry for Marussia and Caterham, they were promised a 'new' F1 that never materialised.  There were going to be spending caps and standard customer engines and distribution of wealth.  It never happened.  And rightly so.  The fans opposed all of the measures that would have gutted F1 to allow small teams to compete in F1.  Even the half measures taken to control costs have plenty of people turned off the sport.

Red Bull understands the sport.  They know that if you want to play with Ferrari and McLaren, you have to act like Ferrari and McLaren.  It takes a lot of money. 

Merecedes understands that too, though we know following on the heels of Toyota, Honda, BMW and Jaguar that spending has to pay off.

We can wax lyrical about how special the privateers and small teams are to F1, but really, teams like Caterham and Marussia showing up to F1 is a like a group of kids who play in the park showing up to play a Prermier League match.  They may love the sport, they may have great ideas about how to play, but they're not going to even provide a contest for the professionals.

If you REALLY want to see Marussia, Caterham (and Sauber and any other team you fear struggling), buy something from one of their sponsors, and then write a postcard to the sponsor (has to be a post card, not an email, not a letter) saying that you are so happy that they support F1 racing, and that's why you bought whatever it is you bought.

At the end of the day, the sport is run by money.  Your money.  If you support the people that support the small teams, then the small teams will grow.  If no one supports the people that support the small teams, then they will go.

[Irisado]

I disagree completely Jeri.  Nobody should expect the small teams to be able to turn up and perform when the entire system is loaded against them from the start.  Also, where's your evidence that the majority of fans were opposed to the budget cap?  I've seen far more complaints about standardised parts and penalties for engine and gearbox changes, than I have the budget cap that failed to materialise.  Heck, the rule changes for this year regarding the power units polarised opinion much more than the budget cap.

It was the top teams who didn't want the budget cap!  Yet, they are the ones who don't want to finish in the second half of the field, or field three cars.  The hypocrisy would be risible if Formula 1 weren't in such a dire state.

Max Mosley has spoken out in support of the small teams: http://www.bbc.co.uk/sport/0/formula1/29789233 - but it's too little too late from him.  He needed to pay much more attention to the budget cap and get it through when he was in charge.  It's no good complaining about it now.

When major manufacturers start pulling out because they're not winning (see 2009), and next time around there are no independents to replace them, only then, in my view, will people realise exactly how much of a pickle the sport is in.  There's no way it can continue without independent teams.

Independent teams can operate effectively under the following conditions:

1. Budget cap
2. Cut aero dependency, because aero research and development eats a lot of money.
3. Cut engine costs
4. Pay them more of the television rights money

The top teams will still be the top teams, but the smaller teams would have much more of a fighting chance.  The sport needs them.

[Jericoke]

I disagree completely Jeri.  Nobody should expect the small teams to be able to turn up and perform when the entire system is loaded against them from the start.  Also, where's your evidence that the majority of fans were opposed to the budget cap?  I've seen far more complaints about standardised parts and penalties for engine and gearbox changes, than I have the budget cap that failed to materialise.  Heck, the rule changes for this year regarding the power units polarised opinion much more than the budget cap.

Let's see... Red Bull took over two struggling teams, and they have now won races with both teams, and 8 total championships.

Mercedes took over a championship team, but hardly a team with a history of success, and one that had been gutted to the core and limped to a championship.

They are now champions too.

Three succes stories, three 'failed' stories.

They can't all win, but saying that the deck is stacked against new teams is just a joke. 

It was the top teams who didn't want the budget cap!  Yet, they are the ones who don't want to finish in the second half of the field, or field three cars.  The hypocrisy would be risible if Formula 1 weren't in such a dire state.

Ferrari was going to leave F1 and start their own series. 

Max Mosley has spoken out in support of the small teams: http://www.bbc.co.uk/sport/0/formula1/29789233 - but it's too little too late from him.  He needed to pay much more attention to the budget cap and get it through when he was in charge.  It's no good complaining about it now.

Mosley was the one who promised  budget caps, let the teams in, and then cancelled the caps.

Bernie isn't the only F1 figure who has a history of trying to have their cake and eat it too.

When major manufacturers start pulling out because they're not winning (see 2009), and next time around there are no independents to replace them, only then, in my view, will people realise exactly how much of a pickle the sport is in.  There's no way it can continue without independent teams.

Independent teams can operate effectively under the following conditions:

1. Budget cap
2. Cut aero dependency, because aero research and development eats a lot of money.
3. Cut engine costs
4. Pay them more of the television rights money

I don't really oppose those ideas.
1.  The international nature of the sport, and compartmental nature of R&D makes a cap impossible.  That's the main reason it never came to fruition:  a multinational conglomerate like Fiat or Mercedes is hardly going to let accountants from the FIA go through their books with a fine toothed comb, which is the only way to make it work.

2.  If the aero war is shut down, then a new front will open up with light weight parts or balancing of the car.  There will always be areas where money makes the car better.

3.  With a limited number of engines produced and sold, the companies need to make their money somehow.  The manufacturers wanted i4 turbos so the R&D would have practical applications.  That would have cut engine costs, but even the compromise seems to be a problem.

4.  Giving someone money just for showing up?  The money needs to be earned, doesn't it?

The top teams will still be the top teams, but the smaller teams would have much more of a fighting chance.  The sport needs them.

F1's problem is the inability to attract the people that would turn small teams into successful teams.

The big teams lose money in order to sell cars or energy 'drinks'.  The medium teams build equity that can be sold to suckers, or hire talented engineers into a 'glorious' position before moving on to revenue generating 'mundane' positions.

The small teams... their goal should be to grow, not to hold on by their finger nails.

There are plenty of ways to help small teams that don't involve taking money from Ferrari*.  Allowing customer chassis/technology sharing.  Encouraging TV producers to show struggling cars to provide better value to sponsors. 

(*I know that taking Bernie's pile of money is the solution everyone wants.  It's not Bernie's money, it's CVC's money.  They aren't rolling in cash, they answer to others when it comes to justifying the purchase price of F1.  I'll agree that Bernie has spent a lifetime screwing over F1 to get where he is, and where we are now.  However, that money isn't available to the teams, so we need to come up with something else.)

[Irisado]

Let's see... Red Bull took over two struggling teams, and they have now won races with both teams, and 8 total championships.

Mercedes took over a championship team, but hardly a team with a history of success, and one that had been gutted to the core and limped to a championship.

They are now champions too.

Three succes stories, three 'failed' stories.

They can't all win, but saying that the deck is stacked against new teams is just a joke.

You're cherry picking, and distorting the issue very badly in the process.

New teams are those which are put together from scratch, not existing teams which are taken over.

Red Bull took over Jaguar.  They inherited a lot of existing infrastructure and personnel from that set-up, they did not start the team from scratch.  Same when they took over Minardi.

The Mercedes example is even less convincing, because they took over a championship winning outfit!

Jeri, none of that constitutes starting a new team.  Starting a new team to come into the sport from scratch is a nightmare.  Everything is so stacked against you, it's a miracle that we've had any new teams at all in the last ten years. 

Ferrari was going to leave F1 and start their own series.

There was a lot of bluff and bluster going on there.  I remain sceptical as to how real that threat really was.  Besides, it wasn't just that threat from Ferrari.  The governing body capitulated in the face of pressure from the big three or four at the time.  The one time it could have made a stand and changed Formula 1 for the better, and it failed to do so.

Mosley was the one who promised  budget caps, let the teams in, and then cancelled the caps.

Which is what I said when I referred to his comments being too little too late .

1.  The international nature of the sport, and compartmental nature of R&D makes a cap impossible.  That's the main reason it never came to fruition:  a multinational conglomerate like Fiat or Mercedes is hardly going to let accountants from the FIA go through their books with a fine toothed comb, which is the only way to make it work.

If they don't, then Formula 1 will cease to exist.  You'll end up with some kind of manufacturers championship, in which the car brands compete against each other, and quit whenever the board decides they're not doing well enough.  At this point, that's not Formula 1, that's some sort of version of the old International Touring Car Championship, only with F1 cars.

There is no reason why they cannot open up the books of their F1 operation.  It's not as though the FIA would need to look at the accounts for the company's entire global operation.

Of course, there is another option.  Manufacturers can only supply engines, and cannot own teams, and then the problem is completely solved, because all teams would then be independent, and would only have Formula 1, or related sports/research as their business, and wouldn't be selling road cars.  That, in my view, is what Formula 1 should be.  Manufacturer run teams don't actually belong in it.  They should just supply the engines.

2.  If the aero war is shut down, then a new front will open up with light weight parts or balancing of the car.  There will always be areas where money makes the car better.

Right, but if it's cheaper than aero research, then it would be better?  If you ask designers who worked for small teams in the past, they will tell you that aero is something that they are always weaker on because they don't have the finances, staff, and resources to keep up with the manufacturers in this department.

3.  With a limited number of engines produced and sold, the companies need to make their money somehow.  The manufacturers wanted i4 turbos so the R&D would have practical applications.  That would have cut engine costs, but even the compromise seems to be a problem.

Something went very wrong somewhere.  I never had any problem with the new engines, but the cost has not been regulated.  Whose responsibility that is, I am not sure of.

4.  Giving someone money just for showing up?  The money needs to be earned, doesn't it?

We've had this discussion before.  Money should be awarded on the basis of all race finishes, and qualifying positions.  All of this would help.

Also, it is not being paid for just showing up.  All the teams have to qualify, put on a show for spectators, get the cars put together, and running safely.  It's not as though they just show up and sit on their hands.

There are plenty of ways to help small teams that don't involve taking money from Ferrari*.  Allowing customer chassis/technology sharing.  Encouraging TV producers to show struggling cars to provide better value to sponsors.

Technology sharing already exists, customer cars are a disaster (see our previous discussions on this issue), and television directors are much better at covering battles lower down the order than they used to be.  More is needed than this. 

(*I know that taking Bernie's pile of money is the solution everyone wants.  It's not Bernie's money, it's CVC's money.  They aren't rolling in cash, they answer to others when it comes to justifying the purchase price of F1.  I'll agree that Bernie has spent a lifetime screwing over F1 to get where he is, and where we are now.  However, that money isn't available to the teams, so we need to come up with something else.)

Ecclestone could pay the teams more if he wanted to.  The investigation into his wealth and where it is all tied up by the BBC's Panorama programme earlier this year was very revealing.  He has got a lot of money from Formula 1 which isn't actually linked to CVC.  Thanks to creative accounting, it looks like it belongs to his wife and various charities, but it doesn't.  It's his money from F1, and he should be giving it to the teams.

[John S]

Before we all get too distracted about the troubles of the current back marker teams perhaps these paragraphs from a longer piece by Will Buxton can illustrate that failure is a perennial problem facing F1 teams, and always has been.

 "In the 64 year history of Formula 1, 164 teams have existed. Today, including Caterham and Marussia, 11 survive. 153 teams have thus failed within that time period. That’s an average of a little over two teams (2.390) failing each season. While unfortunate, the demise of the sport’s two slowest and most poorly funded teams is well within acceptable and statistical, if slightly Darwinian, limits.

Only one team, Scuderia Ferrari, has competed in every year of the championship. Even looking back a decade to the grid of 2004 highlights the fact that just four teams survived to take their place on the grid in 2014. That’s 60% of the 2004 grid that either withdrew, folded, or sold up and shipped out over the last decade.

There are no guarantees in this sport. There never have been and there never will be. For the uncompetitive, both sportingly and financially, life in Formula 1’s state of nature has always fallen under Thomas Hobbes’ most famed principle of social contract theory. Namely, that it is nasty, brutish and short."

Will Buxton, The Buxton Blog, Sun 26th Oct.

The stats make for uncomfortable reading and should be studied by anyone thinking of entering the sport, somehow though I don't think it will put anyone off, like accidents we all think it will happen to someone else. 

However the failure rate of previous years has not been as acute, as in the whole history of the sport, in the last four years - until now of course - so I'm not yet worried for our beloved sport's existence.

For anyone who wants all Will Buxton's article here it is:-

http://willthef1journo.wordpress.com/2014/10/26/nothing-lasts-forever/

[Jericoke]

Let's see... Red Bull took over two struggling teams, and they have now won races with both teams, and 8 total championships.

Mercedes took over a championship team, but hardly a team with a history of success, and one that had been gutted to the core and limped to a championship.

They are now champions too.

Three succes stories, three 'failed' stories.

They can't all win, but saying that the deck is stacked against new teams is just a joke.

You're cherry picking, and distorting the issue very badly in the process.

New teams are those which are put together from scratch, not existing teams which are taken over.

Red Bull took over Jaguar.  They inherited a lot of existing infrastructure and personnel from that set-up, they did not start the team from scratch.  Same when they took over Minardi.

The Mercedes example is even less convincing, because they took over a championship winning outfit!

Jeri, none of that constitutes starting a new team.  Starting a new team to come into the sport from scratch is a nightmare.  Everything is so stacked against you, it's a miracle that we've had any new teams at all in the last ten years. 

Neither Marussia nor Caterham are 'new' teams.  They are both on their third ownerships, just like RBR, STR and Mercedes.  The people who founded the teams realized they weren't going to win, so they have sold the teams to others who knew EXACTLY what they were buying into.

At least, they should have known.  It appears they did not.

I'm all for well run privateers.  I'm not in support of people buying an F1 team without a plan to run a competitive F1 team.

[Irisado]

They were set up as new teams Jeri, the others who you mentioned were not.

Ownership may have changed from when they first entered, but the changes were just name changes, not complete overhauls, as was the case when Red Bull and Mercedes took over the teams you mentioned previously.

The concern for me John is that independents coming in more recent years have been more professional and have had a better foundation, and yet they're struggling more than small teams were in decades gone by.  This is what is so worrying.

[Jericoke]

They were set up as new teams Jeri, the others who you mentioned were not.

Ownership may have changed from when they first entered, but the changes were just name changes, not complete overhauls, as was the case when Red Bull and Mercedes took over the teams you mentioned previously.

The concern for me John is that independents coming in more recent years have been more professional and have had a better foundation, and yet they're struggling more than small teams were in decades gone by.  This is what is so worrying.

Red Bull racing is now the newest team on the grid, in terms of continuous team history.   

You are right that guys can no longer show up with a bank account an engine contract and a few mechanics and compete in F1.  It takes an astonishing amount of money to compete with teams that spend an astonishing amount of money to compete.

Until F1 finds people willing to make that investment (to make a small fortune in racing...), any team that doesn't have a winning heritage is going to struggle.

At the end of the day, the money must be earned though.  Racing is a brutal sport, and it always has been.  If you want to get get paid, you have to win.  Period.

I'm all for changing F1 into a league type arrangement where the teams participate as partners instead of businesses trying to grind each other into dust.  Quite frankly, if Ferrari, McLaren and Mercedes went off and started their own championship without the FIA or FOM, I'd probably watch that.  There are more than enough world class tracks that would gladly support a new series that doesn't have to deal with CVC's crushing debt.

[Scott]

At the end of the day, the money must be earned though.  Racing is a brutal sport, and it always has been.  If you want to get get paid, you have to win.  Period.

I'm all for changing F1 into a league type arrangement where the teams participate as partners instead of businesses trying to grind each other into dust.  Quite frankly, if Ferrari, McLaren and Mercedes went off and started their own championship without the FIA or FOM, I'd probably watch that.  There are more than enough world class tracks that would gladly support a new series that doesn't have to deal with CVC's crushing debt.

If Ferrari and RBR (and Williams?  Mclaren?   ...not sure) get appearance fees (for just showing up, not for winning), surely the back markers are also entitled to them?

[Jericoke]

At the end of the day, the money must be earned though.  Racing is a brutal sport, and it always has been.  If you want to get get paid, you have to win.  Period.

I'm all for changing F1 into a league type arrangement where the teams participate as partners instead of businesses trying to grind each other into dust.  Quite frankly, if Ferrari, McLaren and Mercedes went off and started their own championship without the FIA or FOM, I'd probably watch that.  There are more than enough world class tracks that would gladly support a new series that doesn't have to deal with CVC's crushing debt.

If Ferrari and RBR (and Williams?  Mclaren?   ...not sure) get appearance fees (for just showing up, not for winning), surely the back markers are also entitled to them?

We know that the formula for the appearance fees are based on arcane rules, but the two biggest criteria are:
1)  Success
2)  Showing up

The teams that have shown up the longest are rewarded for that.  We can debate if Williams showing up is better for the sport than Caterham showing up, but Williams has a long history of participating.  They've earned a cut.

RBR has won 8 championships.  That's got to be worth something, doesn't it?

(We all know Ferrari is a special case.  I don't think it's fair.  They know F1 needs Ferrari more than Ferrari needs F1, and they milk it.  If the sport collapses tomorrow, Ferrari will move on to something else)

If Caterham and Marussia wanted a 'thanks for playing' cut of the money, they should have taken over any number of failing teams instead of creating brand new failing teams.

[John S]

If Caterham and Marussia wanted a 'thanks for playing' cut of the money, they should have taken over any number of failing teams instead of creating brand new failing teams.

Appearance money is exactly what the new teams got for the first few years, from memory it was something like $10m each for about 2 or 3 years. The theory was that the new teams should be able to establish themselves and then fight their way up the order. However none of the new teams have managed, until this year, to score a single championship point.

The real question surely is how many years must these back markers be propped up when clearly they have never shown the merit for further funding. Hells Bells, Caterham has been getting a payment of about Ģ25m for finishing 10th each year in the constructors with 'nil points'. 

This constant discussion whether performance/ability or big money makes a better F1 team reminds me of the old 'chicken or the egg' conundrum - what comes first?       

[Scott]

How far is $35-40m per year bonus money going to take a team that has a $30m engine bill to pay?

[Irisado]

Red Bull racing is now the newest team on the grid, in terms of continuous team history.   

You're splitting hairs there, and it's not going to work .

At the end of the day, the money must be earned though.  Racing is a brutal sport, and it always has been.  If you want to get get paid, you have to win.  Period.

No, I don't agree

You know as well as I do that in most given Formula 1 seasons only one to three teams maximum will win a race.  There are exceptions to this, but such seasons are rare.  You cannot have a system whereby winning is the only way to earn money, because, in Formula 1, most teams will simply never be able to win.

Even teams with masses amounts of money and infrastructure couldn't win (Toyota), so I really think that your argument somewhat misses the point.

I am still waiting for you to explain to me how F1 is going to survive if there are no teams bar manufacturers who come and go at the whim of the boardroom and are not actually interested in the sport .  They don't race because they love Formula 1, they race to sell cars!  That is the fundamental problem with modern F1.

[Jericoke]

I am still waiting for you to explain to me how F1 is going to survive if there are no teams bar manufacturers who come and go at the whim of the boardroom and are not actually interested in the sport .  They don't race because they love Formula 1, they race to sell cars!  That is the fundamental problem with modern F1.

What, do Bernie's work for free?  No way!

But the idea that an F1 team can be profitable hasn't been true ever.  Any F1 team making a profit is an aberration.  It's simply a matter of how much money the owners are willing to lose over the course of a season. 

F1 needs owners who understand the economics of the sport.  You are correct that they are few and far between. 

In the past the FIA has worked with suppliers/potential suppliers in setting the rules.

Now it's time to approach potential invenstors and ask what THEY want.  What would it take for Tim Cook to get behind F1?  Or Bill Gates?  An F1 car doesn't HAVE to sell cars.  It can sell 'drinks', or phones, why not iPads or laptops?